## Answers

**Answer : Yes**

Particulars | Amount ($) |

Lease Option | |

Sale Proceeds of Old machine | $ 12,000 |

Add: Incremental Margin (14000*3) | $ 42,000 |

$ 54,000 | |

Lease Payments (16000*3) | $ 48,000 |

Maintainance Costs (2500*3) | $ 7,500 |

Total Cost under Lease Option | $ 1,500 |

(7500+48000 - 54000) | |

Existing Option | |

Total Depreciation | $ 15,000 |

Maintainance Costs (2500*3) | $ 7,500 |

Total Cost under Existing Machine | $ 22,500 |

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